Shaun Hoggan

 

Article Analysis of Situations That May Lead to Unethical Practices

Shaun Hoggan

September 14, 2007

Financial Accounting II/ACC/363

 

 

          In the article “New wave of accountants returns to roots” found in the September 30^th, 2005 edition of the Central New York Business Journal, the author indicates shifts in accounting priorities which will change the demand of future accounting requirements.  Although the article does not mention Sarbanes-Oxley legislation which was passed in July of 2002, it does imply the new demand is caused as a result of the legislation.  The first bullet point in the recently changed demand is for corporate CFOs requirement to meet compliance deadlines which would have been imposed by Sarbanes-Oxley legislation.  This paper will discuss how not complying with Sarbanes-Oxley legislation will lead to unethical practices by corporations and the indicators showing where the shortages in the corporate know how are and how they are being resolved. 

            The Central New York Business Journal article implies that several existing and new skills are needed as a result of this required compliance.  Among those skills and aptitudes needed are: 

• Basic accounting skills
• Internal Controls
• Business-Continuity Planning
• Anti-fraud measures
• Mergers and Acquisitions

The article also suggests opportunities are expanding in the future for consulting roles at large public-accounting firms and independent consultancies.  The article says:

“Technological proficiency will remain a critical skill for next-generation accountants.  Valued areas of expertise include systems documentation, flowcharting, and data warehousing, as well as knowledge of database management and enterprise planning systems”(New wave of accountants returns to roots, 2005)

Corporations do not currently have what it takes to be compliant with Sarbanes-Oxley and they are struggling to find people who can assist in speeding the finish line to compliance.  When the article indicates that “Technological proficiency” is critical this may mean two things.  First, corporations have had a sudden increase in technology changes which have been adopted by the technological savvy.  These people who are the early adopters of technology are not always known for their business savvy practices.  This has caused a dichotomy of segments in the business world which do not know how to relate or communicate with each other.  So the Technological proficient is likely a requirement needed to communicate the business activity which is becoming more dependent on technology to translate into business terms which are pertinent to financial reporting.

            The second reason technical proficiency may be critical is likely from the requirement of today’s corporation to grow on an ongoing basis.  Technology has made significant strides in streamlining data and making arduous tasks more efficient which in turn requires less overhead.  As employment, and wages increase, along with the requirement to report pensions during the employees’ tenure importance lies with becoming increasingly more efficient with as little headcount as possible.  The days of expensing pensions the months they are required to be paid out are gone as the baby boomers are beginning to retire and corporate liabilities for these workers are mounting on the financials.  These liabilities will certainly have an impact on corporate financials for several decades ahead. 

            By not complying with Sarbanes-Oxley certain detrimental effects will automatically occur.  Non technical business workers, if allowed to continue without bridging the technical divide will not have a clear picture of the business effects technology is having on the corporation.  Sarbanes-Oxley requires these corporations to bridge this divide and understand the full implications clearly representing the impact technology has on the business. 

References

New wave of accountants returns to roots. (2005, September 30). Business Journal (Central New York), 19(39), 24-25.